Responsible Funds, October 5: TPG, PIMCO, EIB, DWS, Research Affiliates, Brooks Macdonald

The latest responsible funds news

Private equity giant TPG is looking to raise $3bn for its second social impact fund, media reports have confirmed. Its debut Rise Fund, which aims to market returns while making a positive social and environmental impact, gathered $2bn last year. TPG will start marketing for the next Rise Fund later this year.

Pimco has reportedly launched the GIS Global Investment Grade Credit ESG fund – an ESG version of its $18bn IG credit fund that will integrate ESG using exclusion, evaluation and engagement. It will be managed by CIO of Global Credit Mark Kiesel and Portfolio Manager Mohit Mittal – who both manage the existing Pimco GIS Global Investment Grade Credit fund – with the addition of Head of ESG Strategies Mike Amey.

The European Investment Bank (EIB) has put forward $20m as cornerstone investor of a new impact fund for sustainable forestry in Sub-Saharan Africa and Latin America. Launched by asset manager Finance in Motion and timber sector advisory company Unique, the Arbaro Fund also raised capital from the Finnish Fund for Industrial Cooperation Ltd (Finnfund) and private sphere investors such as Austrian pension fund fair-finance Vorsorgekasse; sustainable investor and registered non-profit organisation GLS Treuhand; and European transport company Girteka Logistics.

Beyond Advisors, the research arm of impact investing platform beyond investing, has reportedly registered with the US Securities and Exchange Commission to begin trading its US Vegan Climate ETF. The fund’s index was built by screening out companies which indirectly or directly harm animals from the Solactive US Large Cap Index, cutting out about 40% of the market capitalisation of the benchmark.

Index firm FTSE Russell has launched a new Shariah-compliant index tracking companies listed on the Singapore Exchange (SGX). The FTSE ST Singapore Shariah Index has been designed to track Shariah-compliant companies listed on SGX and can used as the basis of investment products. Independent screening is carried out by Yasaar Ltd, an organisation with a global network of expert Shariah scholars.

Research Affiliates has launched a strategy focused on gender diversity and governance. RAFI Diversity & Governance uses proprietary methodology developed by LeaderXXchange, integrating gender diversity data with “empirically robust return drivers that are linked to good governance and financial discipline”.DWS has launched an ESG-focused small cap strategy, media reports have confirmed. The DWS Invest ESG European Small/Mid Cap is managed by the German group’s European small and mid cap team, headed up by Philipp Schweneke.

Swedish National Pension Fund Första AP-fonden (AP1) is working with ESG data firm Arabesque S-Ray to develop a sustainability score assessing the compliance of companies with human rights

Investment management firm Brooks Macdonald is launching two new ethical strategies to meet “maturing” demand for ESG products, media reports have confirmed. The two strategies are called Avoid and Advance, with the Avoid strategy centring on exclusions (armaments, tobacco, alcohol, pornography and gambling), and Advance investing in businesses with strong ESG criteria. The minimum investment required to access the portfolios is £250,000. Brooks Macdonald will not offer low risk options.

BNP Paribas has expanded its social impact bond portfolio, putting forward $5.1m as anchor investor for a project focused on boosting employment among veterans with PTSD. The pay-for-success project – called Veterans Coordinated Approach to Recovery and Employment (Veterans CARE) – will support 480 veterans in several US cities. Other investors in the project include Social Finance Inc, the United States Department of Veterans Affairs (VA), the Commonwealth of Massachusetts, the City of Boston, and the City of New York.

New York-listed asset manager AllianceBernstein has reportedly revamped its thematic fund to reflect its environmental and social focus. As of the end of October, the $857m AB Thematic Research Portfolio will be called the AB Sustainable Global Thematic Portfolio and will invest at least 80% of its assets in equity positively exposed to sustainable investment themes. It is overseen by Daniel Roarty, CIO for Thematic and Sustainable Equities.

HSBC Amanah has launched the first ever sukuk that supports the UN’s Sustainable Development Goals (SDGs), media reports have confirmed. Priced at RM500m (€105m), the senior unsecured fixed rate sukuk was rated AAA by RAM Rating Services Bhd. The offering received strong investor demand, with final orderbooks in excess of RM1.4bn and a bid to cover ratio of 2.85 times from 25 accounts. The proceeds will be used to finance businesses and projects that qualify under the HSBC SDG Bond Framework.